Organizational Culture

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Organizational Culture
In any organization, there are the ropes to skip
and the ropes to know. -- R. Ritti and G.
Funkhouser
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Environment and Corporate Culture
GENERAL ENVIRONMENT
ECONOMIC
OPERATING ENVIRONMENT
SOCIAL
NEW ENTRANTS
SUPPLIER
INTERNAL ENVIRONMENT
PRODUCTION TECHNOLOGY STRUCTURE INPUTS
SUBSTITUTES
POLITICAL
CULTURE
COMPETITION
TECHNOLOGY
CUSTOMER
LEGAL
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What is Organizational Culture?

• A system of meaning shared by the organizations
  members
• Cultural values are collective beliefs,
  assumptions, and feelings about what things are
  good, normal, rational, valuable, etc.

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Examples of Organizational Culture

• Innovation and risk taking (3M)
• Outcome orientation (Bausch Lomb)
• Aggressiveness (Microsoft)
• Continuous learning and innovation (Nokia)

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Characteristics of Organizational Culture
Observed behavioral regularities
Philosophy on treatment of employees/ customers
Norms
Rules of employee behavior
Organizational Culture
Dominant values
Organizational climate
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Elements of Organizational Culture

• Physical Structures
• Rituals/ Ceremonies
• Stories
• Language
• Beliefs
• Values
• Assumptions

Artifacts of Organizational Culture
Organizational Culture
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Artifacts Organizational Stories

• Social prescriptions of desired behavior
• Demonstrate that organizational objectives are
  attainable
• Most effective stories
• Describe real people
• Assumed to be true
• Known throughout the organization
• Are prescriptive

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Artifacts Rituals and Ceremonies

• Rituals
• programmed routines
• e.g., conducting meetings, employee forums, x-mas
  parties
• Ceremonies
• planned activities for an audience
• e.g., award ceremonies
• Heroes
• Figure who exemplifies character and deed
• E.g. founders as Tom Watson of IBM, Bill Gates of
  Microsoft

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Artifacts Organizational Language

• Words used to address people, describe clients,
  etc.
• e.g. sir/maam, first name calling
• Leaders use phrases and metaphors as cultural
  symbols
• e.g.. General Electrics grocery store
• Language also found in subcultures
• e.g.. Whirlpools PowerPoint culture
• Slogans
• E.g. Nokia Connecting People

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Organizational Subcultures

• Located throughout the organization
• Can support or oppose (countercultures) firms
  dominant culture
• Two functions of countercultures
• provide surveillance and evaluation
• source of emerging values

E. M. Samelson/Orlando Sentinel
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Artifacts Physical Structures/Space

• Oakley, Inc.s protective and competitive
  corporate culture is apparent in its building
  design and workspace. The building looks like a
  vault to protect its cherished product designs
  (eyewear, footwear, apparel and watches).

Courtesy of Oakley, Inc.
Courtesy of Oakley, Inc.
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Artifacts - Industry
Information technology
Advertising and Media
Call Centers
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How Organizational Cultures Form
Top Management
Philosophy of the Organizations Founders Bill
Hewlett Dave Packard John Gokongwei Bill
Gates
Organizational Culture
Selection
Socialization
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Do Organizations Have Uniform Cultures?
Subcultures
Dominant Culture
Core Values
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Stories
Rituals
How Employees Learn Culture/ How it is
reinforced
Material Symbols
Language
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Benefits of Strong Corporate Cultures
SocialControl
Strong Organizational Culture
SocialGlue
AidsSense-Making
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Organizational Culture
Functions
Liabilities

• Controlling behavior
• Defining boundaries
• Conveying identity
• Promoting commitment

• Blocking mergers
• Inhibiting diversity
• Inhibiting change
• Blocking acquisitions

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Managing, Changing, and Merging Cultures

• Managing through stories, heroes, symbols and
  ceremonies
• Culture often need to be changed to ensure
  organizational success
• Merging cultures through symbolic leaders

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Adaptive Organizational Cultures

• External focus -- firms success depends on
  continuous change
• Focus on processes more than goals
• Strong sense of ownership
• Proactive --seek out opportunities

AP/Wide World
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Bicultural Audit

• Part of due diligence in merger
• Minimizes risk of cultural collision by
  diagnosing companies before merger
• Three steps in bicultural audit
• 1. Collect artifacts
• 2. Analyze data for cultural conflict/compatibilit
  y
• 3. Recommend solutions

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Merging Organizational Cultures
Assimilation
Acquired company embraces acquiring firms culture
Deculturation
Acquiring firm imposes its culture on unwilling
acquired firm
Integration
Both cultures combined into a new composite
culture
Separation
Merging companies remain separate with their own
culture
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Strengthening Organizational Culture
Foundersand leaders
Strengthening Organizational Culture
Culturally consistent rewards
Selection and socialization
Stable workforce
Managing the cultural network
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(No Transcript)
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Studies show that culture is closely related to
the effectiveness of organizations.
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Effectiveness depends on . . .

• the core values and beliefs of the members of the
  organization.
• the policies and practices used by the
  organization.
• the success in translating the core values and
  beliefs into policies and practices.
• the match between values, beliefs, policies,
  practices, and the organizations environment.

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Effectiveness is related to . . .

• involvement participation.
• consistency shared beliefs and values.
• adaptability ability to recognize the need for
  change and the willingness to change
• mission shared purpose.

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Model of Organizational Culture Types
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Four Culture Types
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Studies on Culture Types

• Deshpande, Farley, and Webster (1993) found that
  competing values of the market culture outperform
  those of the clan culture.
• Those of the adhocracy culture outperformed those
  of the diagonally opposing hierarchy culture.
• The speed of response to environmental changes
  which determine a higher performance is thus
  culturally dependent.

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EXERCISE-Organizational Culture Assessment
Instrument (OCAI)
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B
A
D
C
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Case Study Organizational Culture and Performance
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Cultural Change

• Conduct a cultural analysis to identify cultural
  elements needing change
• Make it clear to employees that the
  organizations survival is legitimately
  threatened if change is not forthcoming
• Appoint new leadership with new vision
• Introduce new stories and rituals to convey new
  vision
• Change the selection and socialization process
  and reward systems to support new values

From Management by Robbins and Coulter
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Motivation andOrganizational Culture Types
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(No Transcript)
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The Learning OrganizationManagement Approach in
New Millenium
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Learning Organization Culture

• Has a culture that values sharing knowledge to
  adapt to the changing environment and
  continuously improve
• From Management Fundamentals by Lussier

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When Companies Seek to Foster Certain Culture
Types

• Clan culture needs the five leadership practices
• Adhocrarcy culture needs enabling others to act
  and encouraging the heart
• Hierarchy culture should not use enabling others
  to act and encouraging the heart
• Market culture should consider alternatives to
  leadership practices.

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Culture and Organization Growth Stages
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Case Study Culture and Organization Growth
Stages
PLDT Acquires Smart
NTT Docom of Japan Invests in Smart
Continuous innovation
Expand geographic coverage
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Culture and Motivation
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What is the Organizational Culture in the
Philippines?
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Philippine Organizational Culture

• Espouses a reorientation in the organization to
  three values, namely
• kaugnayan (identity),
• karangalan (pride)
• katapatan (commitment).
• To accentuate these core values,
  corporate leaders emphasize
• paternalism (pagbabahala and pananagutan),
• personalism or pakikipagkapwa (treating a person
  as a fellow human being),
• familism (giving importance to the family as a
  social unit).

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End